Australia news LIVE: RBA hikes interest rates to highest level in almost 18 months; Chalmers won’t pump financial relief into budget

Thank you for joining our rolling coverage of breaking news from Australia and around the world.

Here’s what you need to know:

• Yesterday, the Reserve Bank lifted interest rates for the third time this year (to 4.35 per cent) as insurance against rising inflation from the Iran war, pushing rates to their highest level in nearly 18 months.
• The United Arab Emirates said it was again under attack from Iranian missiles and drones, shortly after US Defence Secretary Pete Hegseth insisted the ceasefire was “not over”.
• The World Health Organisation suspects some rare human-to-human transmission took place between very close contacts on board the MV Hondius cruise ship hit by an outbreak of hantavirus. A Dutch couple and a German national have died, while a British national was evacuated from the ship and is in intensive care in South Africa, officials said. There are three more suspected cases. Four Australians are among almost 150 people stranded on the vessel.

Demand for the latest coin collection celebrating much-loved series Bluey has triggered Australia Post’s website to crash, minutes after the collection was released.

A message on the Australia Post website says the shop is “temporarily unavailable due to high demand”, next to an animation of the blue heeler dog.

An Australia Post source confirmed the outage was caused by a surge in traffic for the coins, available from 8.30am, and that work was under way to resolve the issue.

The latest coin program features new $2 coins featuring a scene from five beloved Bluey episodes. There are eight designs in total.

Tony Burke said the proliferation of online radicalisation had pushed the nation’s intelligence agency to raise the terrorism threat level two years ago.

The Home Affairs minister has announced $74 million will be invested over two years to set up a dedicated national centre to address the threat of online extremism.

“We were raising the threat level, not because there was a specific, credible threat that was in front of us, not because the organised terror cells that we’ve always spoken about were at a heightened level of organisation, but more that there was this additional form of fast online radicalisation,” Burke told ABC Radio National.

Burke said agencies had been working together to tackle the rising threat, but the new Counter Terrorism Online Centre would centralise operations.

“It’s a real change from what people would have viewed as how counterterrorism works,” he said.

Home Affairs Minister Tony Burke says he sought advice from Dennis Richardson after the former ASIO boss resigned from his role in the antisemitism royal commission.

Richardson quit as a special adviser to Commissioner Virginia Bell in March, saying he felt surplus to requirements. Sources told this masthead he felt his role became untenable when Bell decided the interim report would not contain substantive recommendations or findings.

“While he was with the royal commission, it wasn’t appropriate for me to be dealing with him directly because there’s a formality to that process,” Burke told ABC Radio National.

“Once he left, [it] would have been within a week or something like that, that I’d caught up with him and worked through different issues and concerns and had really good discussions with him. They’ve continued with my agencies as well.”

Iran has denied striking the United Arab Emirates “in recent days”, according to a statement by Ebrahim Zolfaghari, a spokesman for the country’s joint military command, read on state TV.

The UAE’s Defence Ministry said overnight that it was responding to another Iranian drone and missile attack. Yesterday it said its air defences had engaged 15 missiles and four drones fired by Iran. There were no reports of any damage or casualties in the hours after the latest announcement.

Tehran officials did not confirm or deny the attacks, but Foreign Minister Abbas Araghchi said on X that the US and the UAE “should be wary of being dragged back into quagmire”.

Indian Prime Minister Narendra Modi called the targeting of UAE civilians and infrastructure “unacceptable”. Pakistan and Saudi Arabia also condemned the strikes.

Treasurer Jim Chalmers has defended the government for breaking a promise not to pursue negative gearing reform.

Asked why Labor did not give Australians the chance to vote on tax reform at the last election, Chalmers said the party’s focus had been on building more homes.

“The first year was very focused on being a year of delivery, and what the budget will signal is a year of, or begin a year of, more ambitious reform,” Chalmers told ABC’s Radio National.

“Since the election, we have been focused on delivering those commitments that we took to the people around housing supply,” he said. “And I don’t think any responsible government can ignore the very real intergenerational pressures that are in our budget, in our tax system, in our housing market, in our economy and our society more broadly.”

Here’s what the Liberal leader told ABC TV a short while ago:

The starting point here is we want to see a solution to the underlying problem, not just a Band-Aid on the bullet wound.

If you take a typical family with a mortgage, they’re paying $29,000 more a year in after-tax income to pay their interest compared to when Labor came to power. That’s a huge number. And a couple hundred bucks a year is not going to make the difference.

We’ll see what sort of relief proposal they put forward, what the budget aggregates look like, because that’s what affects inflation. But what we need to see is containment of government spending.

Treasurer Jim Chalmers has refused to rule out a tax offset of $200 to $300 for taxpayers in next week’s budget.

“I’m not going to add to that kind of speculation. Sometimes that speculation is right, sometimes it’s wrong. This always happens in the lead up to the budget,” Chalmers told Sky News. “What we’ve already made clear is that this is a tax cutting government”.

Asked whether the prospective handouts would feed inflation, Chalmers said “what matters is the overall composition of the budget and the nature of your spending, in addition to or alongside the magnitude of that spending”.

“We’ve made it really clear already that we’ve got very substantial savings in this budget. In fact, this will be one of the most responsible budgets that people have seen, certainly in the last quarter-century or so.”

The Spanish Health Ministry has confirmed it will receive the MV Hondius in the Canary Islands “in accordance with international law and humanitarian principles”.

Once in the Canary Islands, medical teams will examine and treat all passengers and crew and transfer them to their countries, a ministry statement said.

“The World Health Organisation has explained that Cape Verde is unable to carry out this operation,” it said.

“The Canary Islands are the closest location with the necessary capabilities. Spain has a moral and legal obligation to assist these people, among whom are also several Spanish citizens.”

Reuters

Treasurer Jim Chalmers has vowed not to introduce cost-of-living measures in next week’s budget that could trigger further inflation pain, promising to wind back spending and manage the economy in the “most responsible way we can”.

Responding to warnings from Reserve Bank governor Michele Bullock of further inflation challenges should more cost-of-living relief be unveiled next Tuesday, Chalmers confirmed the budget “won’t be pumping a lot of extra stimulus into the economy”, suggesting Bullock was responding to a “hypothetical” question inconsistent with the “reality of the budget”.

“Nobody should assume that the question that was put to governor Bullock by that journalist is the reality of the budget,” Chalmers told ABC TV.

“There won’t be a heap of extra stimulus spending in the budget. We are managing the budget in the most responsible way we can, and that’s because we understand and acknowledge these inflationary pressures.”

The Reserve Bank lifted interest rates to 4.35 per cent yesterday as insurance against rising inflation caused in part by the Iran war, pushing rates to their highest level in nearly 18 months.